Olfactory dysfunction is an early and common symptom in Parkinson's disease (PD). In an effort to determine whether otherwise unexplained (idiopathic) olfactory dysfunction is associated with an increased risk of developing PD, we designed a prospective study in a cohort of 361 asymptomatic relatives (parents, siblings, or children) of PD patients. A combination of olfactory detection, identification, and discrimination tasks was used to select groups of hyposmic (n = 40) and normosmic (n = 38) individuals for a 2‐year clinical follow‐up evaluation and sequential single‐photon emission computed tomography (SPECT), using [¹²³I]β‐CIT as a dopamine transporter ligand, to assess nigrostriatal dopaminergic function at baseline and 2 years from baseline. A validated questionnaire, sensitive to the presence of parkinsonism, was used in the follow‐up of the remaining 283 relatives. Two years from baseline, 10% of the individuals with idiopathic hyposmia, who also had strongly reduced [¹²³I]β‐CIT binding at baseline, had developed clinical PD as opposed to none of the other relatives in the cohort. In the remaining nonparkinsonian hyposmic relatives, the average rate of decline in dopamine transporter binding was significantly higher than in the normosmic relatives. These results indicate that idiopathic olfactory dysfunction is associated with an increased risk of developing PD of at least 10%. Ann Neurol 2004